A local development firm is celebrating the completion of its first workforce housing project, the Sixteenth Square Townhomes, and the homeownership opportunities it provides.
St. Petersburg-based Namaste Homes first proposed the project in late 2019. Plans underwent multiple changes as the developer and city officials partnered to address a then-burgeoning affordable housing crisis.
The 11 townhomes on the corner of 16th Avenue South and Dr. Martin Luther King Jr. Street are now ready for residents. Frederic Samson, president of Namaste, expressed his excitement to open the long-awaited development’s doors.
“Now that we are at the finish line, we have a beautiful product to deliver,” Samson said. “We’re very proud of this project – it’s a great opportunity for homeownership.”
Namaste initially planned to build rental units. Samson said his firm purchased the land in the South St. Pete Community Redevelopment Area (CRA) and approached City Administrator Rob Gerdes for his thoughts on its future.
City officials agreed to provide $286,000 in tax increment financing if Namaste sold the 11 townhomes to those earning at or below 120% of the area median income (AMI). In 2020, that equated to $84,360 annually for a family of four.
However, construction costs soared by over 30%, and 120% of the AMI is now $104,280 for a four-person household. The project’s price tag spiked from $2.5 million to $4.08 million.
Samson noted that the pandemic and subsequent supply chain and labor shortages also presented hurdles. “We kept moving forward and looking for opportunities to bring the cost down but without taking away from any of the quality of the work,” he said.
“It’s not a big profit margin project for a developer, but it’s something that’s needed down there.”
In July, the city council unanimously approved allocating an additional $770,000 in TIF dollars from CRA coffers to see the project come to fruition. Namaste also increased the maximum sales price from $213,000 to $275,000.
However, the median home sale price in St. Petersburg is $475,000. Gerdes reiterated the administration’s focus on providing homeownership opportunities at the July meeting.
He also explained that Namaste could walk away from their agreement and sell the units at market rates. “Since we moved in that direction, to be frank, Namaste is the only one that has produced,” Gerdes said.
The city received something in return. Namaste reduced the project’s income limit to 100% of the AMI – $86,900 for a family of four. That is nearly $20,000 less than the previous cap.
In addition, Samson explained that Namaste only receives CRA funding as it sells homes to qualified buyers. “There was no money given to us to finish the project,” he said. “It was more of, ‘Let’s do something that’s going to make sense – and that will provide results.”
The Sixteenth Square development now provides 11 three-bedroom, 2.5-bath townhomes encompassing 1,200 square feet. The average price is $271,000, lower than the allowable maximum.
Samson noted that those eligible for the city’s downpayment assistance program could purchase a home for around $210,000. Housing officials are now prequalifying potential buyers, which includes completing related classes.
“The city is really investing a lot to bring answers to the price increase issues,” he said. “I think what they’re doing is very positive. Homeownership is a great part of the American dream.”
Samson said Namaste already has “a few” buyers completing the qualification process; he hopes to see closings in early 2024. The company is also developing other projects on city-owned land.
Samson plans to announce a list of available and upcoming units in the coming months. He said Namaste recently completed 27 affordable and workforce single-family homes on small lots in Pinellas Park, and he believes the firm has found its niche with accessible housing.
“We definitely have the appetite to do more,” Samson said.